Uganda’s National Budget has been
presented and explained as a statement of projected revenues and expenditure. The
larger section of the citizenry understand it as a ritual of government to
announce the budget every June of every year. As a young man in the early 90’s I
used to see many people hurdled on radios at small trading centers listening to
the budget speech. Delving deeper, their interest was and largely remains
announcement of tax cuts on basic home use commodities like salt, Kerosine, soap,
sugar, Kimbo (cooking oil) etc and
tax cuts on tools and implements like hoes (jjembe)
and pangas. For this is the true story of many Ugandans across the country. Citizens
are exceedingly unaware of the role they can play in influencing budget
allocations and monitoring budget implementation, yet citizens if informed and
involved form the core of effective budget accountability.
What is now called the ‘budget circle consultative
process’ a supposed democratic platform for citizen participation largely
remains a ritual. We have participation power with out decision power. Well
some private sector interests have been considered (especially manufacturing
and services sectors) but how about farmers who have been crying for double
digit allocation for the last 14 years! Farmers have been voicing this concern
in these budget circle consultative processes; only to be slapped by 3% to 4% allocation,
yet again!
Even the Special support of Shillings 90 Billion, Agricultural Fund,
that was provided to ensure that interest rates in the sector are not more than
10 % per annum did not impact the fortunes of farmers. There remains no
transparency, no information on how this fund can be accessed. No clear and
simple guidelines on how a farmer from Amudat district, Rukungiri, Kenjojo etc
can access this money. All we hear is that the money was finished! Who took it?
What was it used for? How many jobs were created?
Looking at the budget priorities
memoranda from productive sector agencies and ministries of government, one
important thing is amiss! jobs jobs.
The country wants to see budget proposals from for example the Ministry of Trade and Industry that clearly state the money they need and how
many jobs the Ministry will create and a projection of contribution to the GDP
in a given year. Now what do we hear?
we hear concerns about mismatch between budget allocations and actual release,
we hear of failure by government departments and ministries to absorb budgeted and released resources; What do we see? we see services budget
for and approved not reaching the people! We see tertiary institutions churning
out 300,000 graduates with only 40,000 jobs available! I can tell you, this is a crisis.
2.0 Talking Jobs: What is the place of
Uganda’s private sector?
Uganda’s Private Sector is fragile,
largely informal and dominated by Micro, Small and Medium Scale Enterprises
(MSMEs). MSMEs employ approximately 1.5 million people equivalent to 90% of
total non-farm private sector workers. Annual employment growth in the sector
is about 20% per annum[1].
Most of the businesses are located in Kampala (45%) and Central Uganda (21%).
The rest are distributed across the other regions as follows: Western Uganda:
14%, Eastern Uganda: 13%, and Northern Uganda: 7%. Private sector businesses contribute 75% to
national GDP. Agriculture, trade, construction and Manufacturing are the most
important contributors to the national economy. The figure below shows GDP as a
percentage share by economic activity;
Uganda a symetry of business start ups!
The private sector, (MSMEs)annual
employment growth is estimated 20
percenet per annum. Yet the majority of
the businesses (35 percent) are aged between 1 and 5 years and those that 25
years or more are only 4 percent. It is clear from these figures that the
failure rate in business startups is high. The high mortality rate for business
start-ups is explained by the burdensome regulatory environment and the rising
cost of doing business on account of inadequate infrastructure, costly and
unreliable electricity, rising cost of fuel, and the high cost of business
finance. Other factors include corruption, bureaucracy and capacity constraints
in the various public institutions[2]
Uganda a graveyard of nimble
entreprenuerial ideas.
Though FAQ (Kase) prices have now
increased to UGSHS 4500 a kilo at the farm gate in some places, we still
largely export graded coffee. We export massive jobs at the level of roasting,
grinding coffee, packing coffee etc. What should be noted is where as a farmer
makes UGSHS 4500 from a kilo of FAQ coffee, a retailer makes UGSHS 320,000! This
is the same with cotton, tea, fish, etc!
To create jobs, a special Value
Addition Fund (delivered at an interest rate of 5%, grace period of over one
year, with clear guidelines on how to be accessed) should be provided for in
the next budget.
Fierce
urgency to Harvest the demographic dividend.
Uganda’s population is at 33 million. With 7 children per woman (average),
Uganda’s population will be over 130 million in the next fifty years. What
should concern us is the quality of the population. Is our population
skilled,imaginative, agile, curious, entrepreneurial, self reliant and
inspired? Or rather semi skilled, subsistence, surviving and thriving,
nature based (chance based),welfarelist (waiting for handouts), laid back
and cynical? Our people are the only enduring wealth that this country
has. We must invest in them, leaders at all levels must inspire them in
words and actions and align them to a common vision. I know that
Enterprise Uganda is conducting entrepreneurship training,
business advisory and counseling service, information, business planning,
marketing, technology, business linkages and targeting young people,
women, business start-ups and middle level firms. In the 2010/2011 budget,
Enterprise Uganda was allocated one billion Uganda shillings. I have not
looked at their jobs report, however I think this was a good effort and if
they are doing well more resources should be given to them, and others who
are pursuing similar efforts. The foregoing should be suplimented by an Entrepreneurship Fund, long term
and accessed at 5% interest rate. The idea of establishing a School
Leavers Industrial Training Fund must be de-shelved and implemented.
Arrest
Uganda’s productivity and skills deficiency: Ugandan firms have, on
average, the lowest labor productivity in the EAC, even when compared to
other firms within Sub-Saharan Africa, and much lower than that in China
and India . Due to the low productivity, labor costs in Uganda are
relatively higher. Studies indicate that Tanzania’s labor productivity is
40% higher than Uganda’s; while Kenya’s labor productivity is 60% higher,
meaning that a worker from either Kenya or Tanzania has a higher job
output compared to their Ugandan counterpart[1]. The 2011/2012 budget must provide
money to kick start reform of BTVET (Business Technical Vocational
Education and Training) from input based training to competence based
education and training (CBET) through the Uganda Vocational Qualifications
Framework (UVQF) will, if properly implemented, go a long way in ensuring
that the quality of BTVET graduates meets the labour market demands.
Outcomes emanating from a poorly managed BTVET subsector include but not
limited to: high youth unemployment, low labour productivity.
3. Deepen ICT and
Technology Development: Information and Communication Technologies (ICT) play a major role in upgrading the competitiveness of both
domestic and export-oriented industries in Uganda. ICT tools improve operating
and communication efficiency within industries and businesses. ICTs help
businesses connect with customers, improve logistics flows and make distance to
the market or to suppliers of raw materials irrelevant. Therefore, the 2011/2012 budget should provide for a fund to help democratize
ICTs in Uganda. A phased plan to establish computer clinics in all schools and
community information hubs in all parishes of Uganda should start with
2011/2012 budget.
4. Stop budget leakages and runaway public
administration expenditure: UGX100 billion is lost in public
procurement alone! Public administration expenditure take a whooping 23% share
of the national budget, the newly created 17 districts will cost us 28 billion
in the coming financial year (money equivalent to drilling of 1030 boreholes),
at a population of 33 million and GDP of $16 Billion Uganda runs a parliament
of 375 MPS! India with 1 billion people and a GDP of $2698 runs a parliament of
769 MPs. Norway with 4.6 million people has only 43 MPs. I think as a country
we badly need to reflect on the cost of this over representation. I therefore wish to recommend that we adopt
proportional/ per capita representation of 200,000 population quota. At 33
million, we will have only 165 MPs. The foregoing action will mean that as a
country we will save UGX252 billion, money that can be channeled to job
creating and productive sectors of the economy. The same measure should
also be applied on the executive (return to the 1995 Constitutional provision of
only 42 Minister). Balkanisation of Uganda into smalls districts should also be
reviewed, halted, rolled back and emphasis be put on service delivery. Citizen
budget monitoring efforts should be supported in the 2011/2012 budget, baraazas
should be evaluated and given more support.
Conclusion
Uganda is seated firmly on huge
opportunities for private sector growth, job creation and transformation; These
include, the proliferation of mobile phones, a young population, the discovery
of oil, the end of the insurgency in Northern Uganda, the EAC regional integration
process, the tripartite EAC/COMESA/SADC FTA, and the birth of a new state-
Southern Sudan. The National Budget should
therefore focus more on supporting Private Sector Investments, reducing costs
of doing business, value addition to farm produce among others to enhance
access to ready markets for their exports. Reducing the high cost of doing
business through critical infrastructure development; Enhancement of human
capital through critical skills development and health provision ; Increasing
the disposable income by enhancing efficiency of productive sectors in order to
create wealth and take advantage of opportunities available through value
addition particularly, in the Agriculture, Manufacturing and Services sectors
including Tourism, Preparation to exploit the Oil natural resource to provide a
sustainable source of improvements of lives in the country for the current and
future generations.
Morrison Rwakakamba
Chief
Executive Officer
Agency
for Transformation
Re-imagining agricultural and
environmental policy
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